SRS Middle East FZE v Chemie Tech DMCC (Rev 1)

An anti-suit injunction will generally not restrain foreign proceedings brought solely to obtain protective interim measures in support of substantive claims which must be arbitrated, particularly where the arbitration agreement permits applications to competent courts. The position differs where the foreign proceedings must be pursued on the merits to obtain or preserve the measures. In that situation, the proceedings threaten the arbitration agreement, and the need to preserve the measures is not a good reason to permit the breach. The court may restrain further steps and require the party to consent to the foreign court declining jurisdiction, while preserving liberty for steps authorised by the arbitral tribunal.

The claimant sought interim and final anti-suit injunctions against proceedings commenced by the defendant in Sharjah. The parties’ English-law contract required disputes to be resolved by ICC arbitration seated in London. The defendant had obtained provisional measures from the Sharjah courts in support of its contractual claims, had commenced the Sharjah Claim, and said that filing it was necessary to preserve those measures under UAE procedural law.

The defendant accepted that the substantive merits belonged exclusively to the arbitration, but declined to consent unconditionally to the claimant’s application under Article 8 of the UAE Arbitration Law. The central issue was whether the Sharjah Claim threatened a breach of the arbitration agreement and whether preservation of the provisional measures constituted good reason not to grant interim anti-suit relief.

1. Interim injunction granted. The defendant was restrained from taking further steps in the Sharjah Claim and required to consent unconditionally to the claimant’s Article 8 application, pending trial or further order. Liberty was given to apply if the Sharjah court refused that application, and to seek fortification of the claimant’s undertaking as to damages.
2. The court followed the principle in The Kallang (No 2) and The Sam Purpose that foreign proceedings brought solely to obtain security or protective interim measures in support of an arbitration will generally not be restrained. That principle applied where the tribunal had not yet been constituted and the arbitration agreement expressly permitted applications to a competent court for interim measures.
3. The principle did not extend to proceedings which had to be pursued on the substantive merits in the foreign court to obtain or preserve the interim measures. Article 28(2) of the ICC Rules could not sensibly be read as permitting a court application requiring final determination of arbitrable merits outside the arbitration.
4. The defendant had adduced no evidence that staying the Sharjah Claim under Article 8 would cause the provisional measures to be lost. In any event, if the measures could be maintained only by litigating the merits in Sharjah, their loss would provide no good reason to permit breach of the arbitration agreement. The measures would then have been obtained on a basis inconsistent with the promise to arbitrate.
5. The claimant’s participation in the earlier interim proceedings, its separate claim against the guarantor, and alleged delay did not amount to good reason against relief. The claimant had acted promptly once the defendant failed to confirm that the Sharjah proceedings would not be pursued on the merits.
6. The court declined immediately to order discontinuance because there was no evidence of the procedural consequences under Sharjah law. Restraining further steps and requiring consent to the Article 8 application most appropriately preserved the position.